To produce 3 Dimensional (Isometric) drawings the cursor angle needs to be locked at 30º.
To do this you right click on the icon shown below which is in the SNAPS toolbar.

This gives you five options. Select the keyboard option.
You are now asked in the COMMAND toolbar to enter a cursor angle. Type '30' and press enter.

The keyboard is now locked at the set angles to draw.
You will see the angle it is locked at the bottom of the screen where it says 'LOCK 30º'.
To change between drawing lines to the left, right and vertical you can press the full stop (.) button on the keyboard and you will notice the LOCK changes to 330º. Press it again and it will change to 90º.
This allows you to draw at the required angles.

To draw circles in isometric you first need to make sure the Isometric grids option is selected in the drawing setup and that you have locked the cursor at the required angle.

Then go to the DRAW menu and select Ellipse which gives you two options: to draw a full ellipse or to draw part of an ellipse. Once you have made your selection, you will be prompted to position the centre of the ellipse. Remember to have your cursor lock at the correct angle for the positioning of the ellipse.

A recent AllyCAD update also allows you to draw the ellipse by the radius rather than by the major axis.